Item 7.01 Regulation FD Disclosure.
On October 27, 2021, FirstCash, Inc. ("FirstCash") entered into a Business
Combination Agreement (the "Agreement") with FirstCash Holdings Inc., a newly
formed wholly owned subsidiary of FirstCash ("New Parent"), Atlantis Merger Sub,
Inc., a wholly owned subsidiary of New Parent ("Merger Sub" and together with
FirstCash and New Parent, the "FirstCash Parties"), American First Finance Inc.
("AFF") and the seller parties thereto, including Doug Rippel, AFF's founder and
executive chairman ("Rippel"). Pursuant to the Agreement, FirstCash will acquire
AFF by effecting (a) a holding company merger in accordance with Section 251(g)
of the Delaware General Corporation Law whereby FirstCash will merge with and
into Merger Sub, with FirstCash surviving such merger as a direct wholly owned
subsidiary of New Parent (the "New Parent Merger") and (b) immediately following
the New Parent Merger, New Parent will acquire all of the equity interests of
AFF from the Seller Parties (the "AFF Acquisition" and together with the New
Parent Merger, the "AFF Transactions").
The material terms of the Agreement, including the conditions to the proposed
AFF Transactions, will be described in a subsequent filing on Form 8-K.
A copy of the press release issued by FirstCash announcing the proposed AFF
Transactions is filed as Exhibit 99.1 to this report and is incorporated by
reference herein. FirstCash also issued an investor presentation in connection
with the AFF Transactions. A copy of this investor presentation is furnished as
Exhibit 99.2 and incorporated by reference herein.
The information provided in this Item 7.01 (including Exhibits 99.1 and 99.2)
shall not deemed to be "filed" for the purposes of Section 18 of the Exchange
Act, nor shall it be incorporated by reference in any filing made by FirstCash
or New Parent pursuant to the Securities Act, other than to the extent that such
filing incorporates by reference any or all of such information by express
reference thereto.
Cautionary Statement Regarding Forward Looking Statements
This report and the exhibits hereto contain "forward-looking statements" (as
defined in the Private Securities Litigation Reform Act of 1995) regarding,
among other things, the acquisition by FirstCash of AFF and future events or the
future financial performance of FirstCash and AFF. Words such as "anticipate,"
"expect," "project," "intend," "believe," "will," "estimates," "may," "could,"
"should" and words and terms of similar substance used in connection with any
discussion of future plans, actions or events identify forward-looking
statements. The closing of the acquisition is subject to regulatory approvals
and other customary closing conditions. There is no assurance that such
conditions will be met or that the acquisition will be consummated within the
expected time frame, or at all.
Forward-looking statements relating to the acquisition include, but are not
limited to: statements about the benefits of the acquisition, including
anticipated growth of AFF's business, certain synergies and future financial and
operating results; potential financing for the acquisition; FirstCash's plans,
objectives, expectations, projections and intentions; the expected timing of
completion of the acquisition; and other statements relating to the transaction
that are not historical facts. Forward-looking statements are based on
information currently available to FirstCash and involve estimates, expectations
and projections. Investors are cautioned that all such forward-looking
statements are subject to risks and uncertainties, and important factors could
cause actual events or results to differ materially from those indicated by such
forward-looking statements. With respect to the proposed acquisition, these
risks, uncertainties and factors include, but are not limited to: the risk that
FirstCash or AFF may be unable to obtain governmental and regulatory approvals
required for the transaction, or that required governmental and regulatory
approvals may delay the transaction or result in the imposition of conditions
that could reduce the anticipated benefits from the acquisition or cause the
parties to abandon the acquisition; the risk that FirstCash may not be able to
finance the acquisition on favorable terms, if at all; the length of time
necessary to consummate the acquisition, which may be longer than anticipated
for various reasons; the risk that AFF will not be integrated successfully; the
risk that the cost savings, synergies and growth from the acquisition may not be
fully realized or may take longer to realize than expected; the diversion of
management time on transaction-related issues; and the risk that costs
associated with the integration of the businesses are higher than anticipated;
risks related to Rippel's and his affiliates future ownership of approximately
16.6% of New Parent's outstanding stock after closing and the impact of future
sales of such stock by Rippel following the closing.
Furthermore, if the acquisition is consummated, FirstCash will be subject to
additional risks and uncertainties resulting from its ownership of AFF,
including, but not limited to: inherent risks resulting from FirstCash's entry
into the line of businesses currently conducted by AFF; risks related to the
extensive regulatory regimes that the AFF business is subject to and the
heightened effect of future regulatory or legislative actions, including at the
state level, on AFF and the effect of compliance with enforcement actions,
orders or agreements issued by applicable regulators; risks related to AFF's
underwriting practices, loan loss provision and the fact that AFF could
experience credit losses significantly higher than historic losses or its loan
loss
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provision; increased competition from other entities offering "buy now, pay
later" products, including larger financial institutions, retailers,
internet-based lenders and other entities offering similar financial services as
AFF; decrease in demand for AFF's products and services due to changes in the
general economic environment, or social or political conditions; the potential
impact of the announcement or consummation of the acquisition on relationships
with merchants, AFF's bank partner, management team and other employees; risk
related to the ongoing COVID-19 pandemic, including government responses thereto
such as stimulus programs which could impact demand for AFF's products; risks
related to supply chain disruptions impacting the merchants with which AFF does
business and the impact that such disruptions could have on the demand for AFF's
products; risks related to any current or future litigation proceedings; the
ability to attract new customers and merchants and retain existing customers and
merchants in the manner anticipated; risks related to AFF's merchant
concentration; the ability to hire and retain key personnel; reliance on
existing information technology systems; ability to protect intellectual
property rights; impact of security breaches, cyber-attacks or fraudulent
activity on AFF's operations and reputations; the risks associated with
assumptions the parties make in connection with the parties' critical accounting
estimates and legal proceedings; and the potential of economic downturn or
effects of tax assessments or tax positions taken, risks related to goodwill and
other intangible asset impairment, tax adjustments, anticipated tax rates, or
other regulatory compliance costs.
Additional information concerning other risk factors is also contained in
FirstCash's most recently filed Annual Report on Form 10-K, subsequent Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and other Securities and
Exchange Commission ("SEC") filings.
Many of these risks, uncertainties and assumptions are beyond FirstCash's
ability to control or predict. Because of these risks, uncertainties and
assumptions, you should not place undue reliance on these forward-looking
statements. Furthermore, forward-looking statements speak only as of the
information currently available to the parties on the date they are made, and
FirstCash does not undertakes any obligation to update publicly or revise any
forward-looking statements to reflect events or circumstances that may arise
after the date of this communication. FirstCash does not give any assurance (1)
that either FirstCash or AFF will achieve its expectations, or (2) concerning
any result or the timing thereof. All subsequent written and oral
forward-looking statements concerning FirstCash, AFF, the acquisition or other
matters and attributable to FirstCash, AFF or any person acting on their behalf
are expressly qualified in their entirety by the cautionary statements above.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
99.1 Press release, dated as of October 28, 2021.
99.2 Investor Presentation, dated as of October 28, 2021.
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document contained in Exhibit 101)
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